Free Proposed Additional Facts - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS BLUE LAKE FOREST PRODUCTS, INC., ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES, ) ) Defendant. ) TIMBER PRODUCTS COMPANY, Plaintiff, v. THE UNITED STATES, Defendant. CLR TIMBER HOLDINGS, INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

No. 01-570C (Judge Williams)

No. 01-627C (Judge Williams)

No. 04-501C (Judge Williams)

ADDENDUM TO DEFENDANT'S PROPOSED FINDINGS OF UNCONTROVERTED FACTS Pursuant to Rule 56(h)(1) of the Rules of this Court, the following are the additional material facts that the United States contends are not in dispute. Defendant's Proposed Finding of Uncontroverted Fact No. 21 The Northwest Forest Plan ("NFP") Record of Decision ("ROD") instructed that Category 2 surveys should "precede the design of all ground-disturbing activities . . . implemented in [Fiscal Year] 1999 or later. App. 98, NFP ROD Standards and Guidelines at C-

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5. Defendant's Proposed Finding of Uncontroverted Fact No. 22 Questions arose within the Forest Service and the Bureau of Land Management regarding the implementation of the NFP, and, to ensure consistent responses between agencies and between functional disciplines within the same agency, the agencies established the NFP Issue Resolution Team ("IRT"). App. 101, T. Hussey Decl. ¶¶ 7-8. Tom Hussey and Joyce Casey were the lead Forest Service staff on the NFP IRT. Larry Larson was the BLM lead on the NFP IRT. App. 101, T. Hussey Decl. ¶ 8. Defendant's Proposed Finding of Uncontroverted Fact No. 23 One of the issues the IRT dealt with was interpreting the transition period established by the NFP for phasing in the survey requirements, "Survey prior to ground-disturbing activities." Specifically, the IRT was asked to define the term "implemented" within the context of the NFP ROD and the accompanying Standards and Guidelines. App. 98, NFP ROD, Standards and Guidelines at C-5; App. 103, T. Hussey Decl. ¶ 13. Tom Hussey and Larry Larson decided that they needed assistance to resolve this issue, and, therefore, met with Randy Hickenbottom, Chair of the Survey and Manage Workgroup, Cheryl McAfree, a botanist, Lyndon Werner, a BLM timber sale specialist, and Nancy Anderson, another BLM employee, several times. App. 104, T. Hussey Decl. ¶ 14. This group looked at three possible ways to define "implementation" in the context fo the NFP ROD. Implementation could mean: (1) when there is physical activity on the ground; (2) when an agency signs a contract; or (3) when the NEPA decision is signed. App. 104, T. Hussey Decl. ¶

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Defendant's Proposed Finding of Uncontroverted Fact No. 24 The IRT decided that a project is implemented when the NEPA decision is signed. The group adopted this definition because it made more sense for the responsible official to have the survey information before he or she signed off on a project's NEPA decision. Any other definition of "implement" would create a situation where surveys could require changes in the NEPA decision documents after those documents were signed or after contract award, which would lead to additional costs and possible contract modification or termination. App. 105, T. Hussey Decl. ¶ 20. Defendant's Proposed Finding of Uncontroverted Fact No. 25 Another definition of "implement" would effectively read out the NFP's phased-in survey requirements, which the NFP intended to provide time to develop and apply the survey protocols. App. 114, R. Devlin Decl. ¶ 16. Defendant's Proposed Finding of Uncontroverted Fact No. 26 The IRT forwarded this recommendation to the Regional Foresters for Regions 5 and 6, and to the BLM State Directors for Oregon and California, who jointly issued a memorandum on November 1, 1996. This memorandum, commonly referred to as the "NEPA Decision Equals Implementation" memorandum, states that a project is implemented for purposes of the NFP when the NEPA decision is signed. App. 116-121. Defendant's Proposed Finding of Uncontroverted Fact No. 27 The Forest Ecosystem Management Assessment Team ("FEMAT") assembled after President Clinton's April 1993 "Forest Conference" in Portland, Oregon. The FEMAT, a group made up of scientists and technical experts from the Forest Service, BLM, Environmental 3

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Protection Agency, Fish & Wildlife Service, National Marine Fisheries Services, and several universities, was charged with preparing an assessment based upon an ecosystem approach to forest management. App. 122, J. Hickenbottom Decl. ¶ 2. Defendant's Proposed Finding of Uncontroverted Fact No. 28 The FEMAT analyzed ten different options that encompassed mixtures of LateSuccessional Reserves ("LSRs"), Riparian Reserves ("RRs"), and prescriptions for forest management both inside and outside of the reserves. The vast majority of management activities would occur in Matrix lands, those lands outside of the LSRs and RRs. For each of the ten options, the FEMAT "evaluated the likelihood of maintaining well-distributed habitat conditions on the federal lands for threatened marbled murrelets and northern spotted owls." Furthermore, assessments were done for over 1,000 plant and animal species that were "thought to be closely associated with late-successional forests." For these 1,000 species, the FEMAT suggested that if the species had an 80 percent or greater likelihood of stabilizing, well-distributed across federal lands, that was the point at which a species' viability could be assured. Significantly, the FEMAT noted that "species with scores lower than 80 percent should not automatically be regarded as unviable." The FEMAT put together a report commonly known as the FEMAT Report. App. 123-124, J. Hickenbottom Decl. ¶ 3. Defendant's Proposed Finding of Uncontroverted Fact No. 29 A team from the Forest Service and BLM used the FEMAT Report to prepare a draft Supplemental Environmental Impact Assessment ("SEIS"), identifying FEMAT's ten different alternatives as options. The team decided upon Alternative 9, and prepared the draft SEIS, which was sent out for public comment. After receiving public comment, additional analysis was 4

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conducted on many of the 1,000 species; this additional analysis was included as an appendix to the final SEIS, and is commonly referred to as "Appendix J2" or "Additional Species Analysis." The Additional Species Analysis "identified species to be surveyed and a prescribed management of the species' habitat to increase the likelihood that the species' populations would stabilize, well distributed across federal lands." App. 124, J. Hickenbottom Decl. ¶ 4. Defendant's Proposed Finding of Uncontroverted Fact No. 30 The red tree vole was identified in the Additional Species Analysis. App. 126, J. Hickenbottom Decl. ¶ 12. However, research in the FEMAT Report and the Additional Species Analysis demonstrates that the red tree vole was "thought to be in less dire circumstances." The FEMAT Report determined that Alternative 9 resulted in a 73 percent likelihood of achieving habitat sufficient to allow the red tree vole to stabilize across federal lands; had the red tree vole received a 7 percent higher likelihood rating in the FEMAT Report, it would not have been included in the Additional Species Analysis. App. 127, J. Hickenbottom Decl. ¶ 13. Defendant's Proposed Finding of Uncontroverted Fact No. 31 The final SEIS Species Analysis Team's Mammal Subgroup determined that it was unnecessary to protect every red tree vole site; therefore, the red tree vole was not included in the Category 1 Survey and Manage species. The subgroup further decided that the red tree vole sites should be assessed in relation to their value in adding to connectivity between LSRs and RRs, many of which were not ecologically functional because of past management practices. The group decided that it was important to prevent isolation of major portions of the red tree vole population. Therefore, they determined that the red tree vole should be included in the Component 2 Survey and Manage species by managing the red tree vole population in the lands 5

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between LSRs. App. 127-128, J. Hickenbottom Decl. ¶ 14. Defendant's Proposed Finding of Uncontroverted Fact No. 32 The Survey and Manage Workgroup developed interim guidance for the Forest Service and BLM to implement the Component 2 Survey and Manage requirement for the red tree vole. Id. The group determined that, because of concerns related to ensuring connectivity between LSRs, "those requirements should be designed to maximize the efficiency and efficacy in increasing the likelihood of providing for a well-distributed red tree vole population." The group solicited input from the FEMAT scientists, the Additional Species Analysis Team, and the final SEIS team, and, based upon that input, the group developed the recommendations that were ultimately adopted in the November 4, 1996 memorandum entitled "Interim Guidance for Survey and Manage Component 2 Species: Red Tree Vole," informally known as the Red Tree Vole Memorandum. App. 128, J. Hickenbottom Decl. ¶ 15. Defendant's Proposed Finding of Uncontroverted Fact No. 33 The threat to the red tree vole's continued viability was minimal. App. 130, J. Hickenbottom Decl. ¶ 18, App. 132. Rather, the concern with the red tree vole related to past forest management practices that fragmented the LSRs and resulted in the creation of young, even-aged forests. Therefore, the focus of the red tree vole mitigation measure was to improve LSR connectivity, rather than managing known sites that may be isolated due to a lack of LSR connectivity. App. 129, J. Hickenbottom Decl. ¶ 17. For example, the group decided that if a stand of trees containing a red tree vole population was surrounded principally by older forests, that stand of trees would add little to the connectivity already provided by the older forests. On the other hand, a stand containing red tree voles in an area with almost no older forest or suitable 6

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habitat would have a much higher value in maintaining connectivity between LSRs. Finally, if a stand of trees containing red tree voles was located in an area isolated from federally managed lands, and, therefore, LSRs, that stand could not contribute to improving the species' viability. App. 130, J. Hickenbottom Decl. ¶ 18. Defendant's Proposed Finding of Uncontroverted Fact No. 34 According to the Red Tree Vole Memorandum, before conducting surveys, geographic information system ("GIS") information was to be used to analyze federal lands to screen the lands based upon their value in increasing LSR connectivity. The first screen would determine how much land was federally managed, and, if the watershed contained less than 10 percent federal lands, survey and manage was not required for those areas. The group decided not to survey in areas with less than 10 percent federal lands because, due to the small portion of federal lands, those areas could not contribute to the goal of LSR connectivity. The second screen would determine whether "at least 40 percent of the federal lands in the watershed was forested with at least 60 percent crown closure, an average conifer tree diameter at breast height of at least 10 inches, and whether that closure and diameter could be maintained through the year 2000." If federal lands met the requirements outlined in the second screen, then there was no need to survey and manage for the red tree vole because the habitat already provided adequate LSR connectivity. App. 128-129, J. Hickenbottom Decl. ¶ 16. Defendant's Proposed Finding of Uncontroverted Fact No. 35 Ms. Lois Schiffer, Assistant Attorney General for the Department of Justice's Environment and Natural Resources Division ("ENRD") at the time of the ONRC Action litigation, did not have any recollection regarding the statement "NEPA decision equals 7

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implementation is nonsense." App. 137-139, L. Schiffer Depo. Tr. at 7:14-7:18, 52:3-52:15. Defendant's Proposed Finding of Uncontroverted Fact No. 36 Mr. Edward Boling, lead counsel for the ONRC Action litigation, and Mr. Peter Coppelman, the Deputy Assistant Attorney General at ENRD, do not recall any conversation where Ms. Schiffer allegedly said "NEPA decision equals implementation is nonsense." App. 140-145, E. Boling Depo. Tr. at 8:7-8:10, 91:15-92:11; App. 146. Defendant's Proposed Finding of Uncontroverted Fact No. 37 The Forest Service must consider the competing interests of the environment and the timber industry, a fact that President Clinton recognized during the Forest Conference on April 2, 1993: "How can we achieve a balanced and comprehensive policy that recognizes the importance of the forest and timber to the economy and jobs in this region, and how can we preserve our precious old-growth forests, which are part of our national heritage and that, once destroyed, can never be replaced?" App. 150. Defendant's Proposed Finding of Uncontroverted Fact No. 38 The Forest Service must meet congressionally-mandated timber-harvest levels. App. 109, R. Devlin Decl. ¶ 4. Defendant's Proposed Finding of Uncontroverted Fact No. 39 The National Forest Products Association ("NFPA") acknowledged that the 2400-6 standard timber sale contract was developed in 1970 with "extended discussions between NFPA's Federal Timber Purchaser's Committee and the Forest Service." App. 162-163, R. Fitzgerald Decl. ¶ 3, Ex. 18 (App. 255-257).

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Defendant's Proposed Finding of Uncontroverted Fact No. 40 The Forest Service, NFPA, other timber industry groups, and individual members of the timber industry, communicated throughout 1971 and 1972 regarding possible revisions to the standard timber sale contract. App. 162-163, R. Fitzgerald Decl. ¶ 3, Exs. 1-5 (App. 169-183). After these communications, the standard timber sale contracts were revised in September 1973. App. 163, R. Fitzgerald Decl. ¶ 4, Ex. 18 (App. 255-257). Defendant's Proposed Finding of Uncontroverted Fact No. 41 The standard timber sale contracts contained terms that were favorable to the timber industry, including allowing the purchasers to operate their sales with little Forest Service oversight, and the contract did not contain a clause that would allow the Forest Service to terminate the contract for its own convenience, or a liquidated damages provision. App. 163, R. Fitzgerald Decl. ¶ 5. These terms remained unchanged for about two decades. App. 164, R. Fitzgerald Decl. ¶ 6. Defendant's Proposed Finding of Uncontroverted Fact No. 42 The Forest Service has continued, over the past thirty years, to meet with and seek comment from the timber industry concerning revisions to the timber sale contract. R. Fitzgerald Decl. ¶ 7, Exs. 6-17 (App. 184-254). Defendant's Proposed Finding of Uncontroverted Fact No. 43 When the Forest Service, in the late 1980s and early 1990s, decided to revise the standard timber sale contract to reflect changes in environmental laws, court decisions interpreting environmental laws, and to protect the Forest Service's financial interests, the Forest Service sought input from the timber industry. In particular, NFPA provided numerous comments on 9 App. 164,

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C/CT6.01. App. 164, R. Fitzgerald Decl. ¶ 8, Ex. 14 (App. 211-236). Defendant's Proposed Finding of Uncontroverted Fact No. 44 The C/CT6.01 language from the June 1990 timber sale contracts, which the NFPA commented on, is similar to the C/CT6.01 language in the plaintiffs' timber sale contracts. The 1990 version of C.CT6.01 permitted interruption or delay of operations upon the written request of the Contracting Officer "[t]o comply with a court order, regardless of whether this sale is named in such an order, upon determination of the Contracting Officer, in his/her sole discretion, that the order would be applicable to the conditions existing on this sale . . . ." App. 165, R. Fitzgerald Decl. ¶ 11, Exs. 13-14 (App. 206-236). The plaintiffs' timber sale contracts provide for the interruption or delay of operations upon the written request of the Contracting Officer "to comply with a court order, issued by a court of competent jurisdiction." App. 165, R. Fitzgerald Decl. ¶ 10. Defendant's Proposed Finding of Uncontroverted Fact No. 45 The NFPA commented specifically on C/CT6.01 in a letter dated December 4, 1989, in which NFPA stated its belief that the Forest Service had "sufficient authority to interrupt operations under B9.3 - BREACH when used in conjunction with other existing environmental protection provisions" and stated that section (a) of C/CT6.01 "should be dropped." App. 164165, R. Fitzgerald Decl. ¶ 9, Ex. 14 (App. 211-236). In another letter, NFPA wrote: We also appreciate the opportunity we had to discuss the proposed liability provisions with you and your staff in Scottsdale. We also recognize the effort your staff put forth to: (1) address some of our concerns in the revised proposal; and (2) respond to our concerns as quickly as they did. App. 166, R. Fitzgerald Decl. ¶ 13, Ex. 14 (App. 211-236). 10

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Defendant's Proposed Finding of Uncontroverted Fact No. 46 Another letter from NFPA, dated May 1990, NFPA acknowledged that the Forest Service made efforts to modify C/CT6.01 in response to NFPA's concerns, and acknowledged that the Forest Service provided it an opportunity to comment on and negotiate the terms of the contracts. App. 164-165, R. Fitzgerald Decl. ¶ 9, Ex. 14 (App. 211-236). The NFPA further expressed its appreciation for the opportunity to discuss proposed contract provision C/CT6.01, and other provisions addressing modification, termination, and compensation in the timber sale contracts. App. 166, R. Fitzgerald Decl. ¶ 13, Ex. 14 (App. 211-236). Defendant's Proposed Finding of Uncontroverted Fact No. 47 The Forest Service still communicates with the timber industry regarding these standard timber sale contracts. The Forest Service met with members of the NFPA Federal Timber Purchaser's Committee ("FPTC") and its counsel, Alan Saltman, to consider revisions to the latest version of the standard timber sale contracts. App. 166-167, R. Fitzgerald Decl. ¶ 14. Defendant's Proposed Finding of Uncontroverted Fact No. 48 Over the past thirty years, and within the bounds of laws governing the formulation of regulation and policy, the Forest Service has engaged in discussions with members of the timber industry about the standard timber sale contracts and issues affecting the timber industry. App. 167-168, R. Fitzgerald Decl. ¶ 17. Defendant's Proposed Finding of Uncontroverted Fact No. 49 These timber sale contracts include a clause that permits deviation by requiring purchasers to submit their own plans of operation prior to commencing work each season. App. 268, 273. 11

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Defendant's Proposed Finding of Uncontroverted Fact No. 50 Other clauses in the timber sale contracts contain "objectives" and "methods" for harvesting timber. For example, the Too Wild contract contains C6.41# - Special Felling Objectives, which states: "felling objectives shall be accomplished by the type of felling methods or equipment listed herein. Methods or equipment other than those specified may be approved." App. 274. The Too Wild contract also contains C6.42# - Special Yarding/Skidding Methods, allows for the use of "[m]ethods or equipment other than those specified . . . ." App. 275. The Jack Heli contract, in clause C6.411# - Directional Felling, provides that: "[D]irectional felling shall not be required when in the faller's judgment it is unsafe to do so, and the tree shall be left standing." App. 269. The Jack Heli contract also includes clause C5.411 - Dust Abatement for Temporary Roads, which states: "Purchaser may choose the material used in dust abatement." App. 270. The Happy Thin contract includes the Directional Felling clause, and clause CT5.414 - Snow Removal, which states: "[i]f Purchaser removes snow from roads, such work shall be done in a manner that will protect roads and adjacent resources. App. 350-351. Defendant's Proposed Finding of Uncontroverted Fact No. 51 The Northwest Forestry Association, a timber industry group, issued a newsletter, Forestry Forum, that, among other things, tracked the ONRC Action litigation ­ including making reference to the alleged "secret agreements" between the ONRC Action plaintiffs and the Government. App. 277-295. The newsletter also discussed the lawsuit's potential impact on timber sales in the region. Id.

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Defendant's Proposed Finding of Uncontroverted Fact No. 52 The prospectus for the Jack Heli timber sale included the language: "This sale has been identified in a lawsuit in which plaintiffs contend that the Forest Service has violated the Northwest Forest Plan in preparing the sale. Language in this sale's contract has been included to limit the government's liability in case of cancellation to the holding cost." App. 304; App. 309-310, E. Matthews Decl. ¶ 11. Defendant's Proposed Finding of Uncontroverted Fact No. 53 The Forest Service delayed awarding these sales. For the Jack Heli timber sale, the Forest Service requested and received permission to extend the purchaser's bid. App. 311-312. Defendant's Proposed Finding of Uncontroverted Fact No. 54 In late 1998 and early 1999, Ed Matthews, Contracting Officer for the Happy Thin and Jack Heli timber sales, routinely communicated with representatives from the timber industry, including Blue Lake Forest Products, Inc. and Timber Products Co., and discussed the ONRC Action litigation and its potential impact on the Klamath's timber sale program. App. 309, E. Matthews Decl. ¶ 8. Defendant's Proposed Finding of Uncontroverted Fact No. 55 Prior to awarding the Too Wild timber sale contract, Tom Link, Contracting Officer for the Too Wild timber sale, provided information to CLR Timber Holdings, Inc., regarding ONRC Action, including general information about the case, how it affected the delay in award, and information regarding ongoing settlement negotiations. App. 316, T. Link Decl. ¶ 8.

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Defendant's Proposed Finding of Uncontroverted Fact No. 56 Plaintiffs did not accept the Forest Service's estimates regarding the amount of timber available for harvest on a particular sale; instead, the plaintiffs all cruised the sales themselves to obtain more accurate estimates of the amount of timber available for harvest. App. 325, D. Bonde Depo. Tr. at 48:10-49:3; App. 323, B. Turner Depo. Tr. at 45:16-45:19; App.321, J. Broom Depo. Tr. at 10:16-10:20. Defendant's Proposed Finding of Uncontroverted Fact No. 57 The Forest Service provided notice to the ONRC Action plaintiffs of its intent to award the three timber sales at issue, and the ONRC Action plaintiffs did not take action prior to award. App. 328-330, App. 317-318 (T. Link Decl. ¶ 14). Defendant's Proposed Finding of Uncontroverted Fact No. 58 ONRC Action filed a complaint challenging, among other things, the Forest Service's November 1, 1996 memo that defined the term "implement" as the time when the NEPA decision documents are signed, and the November 4, 1996 memo that "excludes approximately 5.5 million acres . . . nearly 90% of the red tree vole habitat . . . from the survey requirement." ONRC Action Compl., ¶¶ 31-34. App. 341-342.

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Respectfully submitted,

JEFFREY S. BUCHOLTZ Acting Assistant Attorney General

JEANNE E. DAVIDSON Director

s/Bryant G. Snee BRYANT G. SNEE Deputy Director Of Counsel: Lori Polin Jones James L. Rosen Marcus R. Wah Ben Hartman Office of the General Counsel United States Department of Agriculture s/Ellen M. Lynch ELLEN M. LYNCH Trial Attorney Commercial Litigation Branch Civil Division U.S. Department of Justice Attn: Classification Unit 1100 L Street, N.W., 8th Floor Washington, D.C. 20530 Tel: (202) 353-7994 Fax: (202) 514-8624 Attorneys for Defendant

May 2, 2008

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Certificate of Filing I hereby certify that on this 2nd day of May, 2008, a copy of "Addendum To Defendant's Proposed Findings Of Uncontroverted Facts" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/Ellen M. Lynch Ellen M. Lynch